S&P Closes the Door, Here Are the Institutions Putting SpaceX IPO on an Investment Blacklist or Expressing Strong Concerns
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SpaceX's upcoming IPO at a $1.77 trillion valuation faces significant scrutiny. S&P Global's refusal to modify fast-track inclusion rules means SpaceX will be ineligible for the S&P 500 for at least a year, excluding passive funds. Danish pension fund Akademiker Pension blacklisted SpaceX due to "grossly inflated" valuations and poor governance. Three major public pension funds voiced concerns to Elon Musk about his overwhelming voting control and restrictive shareholder rights. Valuation estimates diverge sharply, with Morningstar valuing SpaceX at $780 billion and projecting value destruction from its unproven AI business, while Goldman Sachs forecasts substantial AI revenue growth.
TradingKey - On June 12, Eastern Time, SpaceX will debut on Nasdaq at a valuation of $1.77 trillion, raising $750 billion and shattering the global record for an IPO. However, on the eve of the IPO, S&P Global was the first to close the door. On June 4, S&P explicitly refused to modify fast-track inclusion rules for mega-IPOs like SpaceX.
This means that the company with the largest IPO in history will not be eligible for inclusion in the S&P 500 for at least one year after its listing, and it must still satisfy current profitability and public float requirements. Trillions of dollars in passive funds tracking the S&P 500 will be unable to hold SpaceX for the foreseeable future.
Meanwhile, some institutions are using various methods to express their stance on the SpaceX IPO with a "vote of no confidence."
Danish pension fund blacklists SpaceX
On May 29, the Danish pension fund Akademiker Pension, which manages approximately $25 billion, placed SpaceX on its investment blacklist, citing "grossly inflated" valuations and a "disastrous" governance structure.
Chief Investment Officer Anders Schelde stated that a fair valuation "should not exceed $1 trillion" and that the pricing is "narrative-driven" by Elon Musk, with investors being asked to accept an "unprecedentedly low risk premium" for a highly uncertain company. The fund's blacklist covers IPO subscriptions, secondary market trading, and passive index holdings.
Three major public pension funds send joint letter to Elon Musk
On May 14, New York State Comptroller Thomas DiNapoli, New York City Comptroller Mark Levine, and California Public Employees' Retirement System (CalPERS) CEO Marcie Frost sent a joint letter to Musk expressing "serious concerns" regarding SpaceX's governance structure. The three institutions collectively manage over $1 trillion in assets.
The joint letter's points of contention include: Musk controls 79% to 85% of voting power via super-voting rights despite holding only about 42% of equity; removing Musk requires his own consent; shareholder claims are handled via mandatory arbitration, precluding class-action lawsuits; and derivative lawsuits can only be initiated by those holding at least 3% of shares, a threshold amounting to tens of billions of dollars based on IPO valuation.
The letter described this as "the most management-friendly governance structure of its scale in the history of U.S. public markets," urging SpaceX to make substantive revisions before its final prospectus. While the three institutions have begun reviewing their investment authority, they have not declared a ban on investing in SpaceX.
SpaceX Valuation Divergence: Goldman Sachs Sees 100x Growth, Morningstar Warns of Value Destruction
Morningstar analyst Nicolas Owens, using a discounted cash flow model, estimates SpaceX's fair value at just $780 billion, with the space launch and Starlink businesses accounting for approximately $611 billion and the AI business roughly $170 billion. The report notes that xAI's business model remains unproven and carries a risk of value destruction .
Meanwhile, Goldman Sachs ( GS ), the lead underwriter for the IPO, projected in its roadshow documents that SpaceX's AI business revenue will grow from $3.2 billion in 2025 to $322 billion by 2030, marking a fundamental divergence from Morningstar's assessment.
This content was translated using AI and reviewed for clarity. It is for informational purposes only.
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